Uber dodged a serious roadblock to its business model yesterday, as it settled two lawsuits brought by drivers who wanted to be classified as employees instead of independent contractors, according to media reports.
CNN reports that Uber has agreed to pay up to $100 million to the 385,000 drivers in California and Massachusetts, but Uber's much-debated independent contractor employment model will not change.
Uber will make an $84 million initial payment and $16 million more if it goes public, CNN reports. The settlement is pending approval by the court. Uber has been battling with drivers for months over the issue of reimbursement for expenses, among other things
In the settlement, Uber also agreed to provide more warning to drivers before they are removed from the service, and it must create an appeals process for drivers who believe they have been unfairly fired.
According to CNN, the settlement also includes Uber establishing "driver associations" that will represent workers in management negotiations, and drivers will be able to post signs in their cars explaining that while tips are not included or required, "they would be appreciated," Shannon Liss-Riordan, an attorney who represented drivers in both lawsuits, told CNN.
"We believe these to be very significant changes that will improve work conditions for Uber drivers," Liss-Riordan told CNN. While Uber will avoid transforming to an employee-based workforce, Liss-Riordan said the classification battle is far from over, telling CNN that the "debate will not end here."